Industry continues to expand in 4M24

RUSSIA ECONOMICS - In Brief 30 May 2024 by Evgeny Gavrilenkov

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Rosstat reported that in 4M24 and April alone, industrial output grew y-o-y by 5.2% and 3.9%. Some y-o-y deceleration in April was, to some extent, an effect of an additional calendar day in February (leap-year effect). Going forward the magnitude of this effect will ease, and it looks as though industrial growth at a rate somewhat below 4% is what Russian industry can deliver this year. In seasonally adjusted terms, industrial output contracted in April by 0.2% m-o-m. Fueled by budgetary spending and consumer credit growth, the manufacturing segment performs better than mining. The latter contracted by 1.7% y-o-y in April but was still up by 0.4% y-o-y in 4M24. Mining will remain under pressure given the external constraints Russia faces since February 2022. Manufacturing grew by 8.3% y-o-y in April, which brought the 4M24 tally to 8.7% y-o-y. Growth remains not too bad across the entire manufacturing segment as many of its sub-segments deliver strong double-digit growth. Car manufacturing, metal-working, consumer electronics and electrical equipment production are among them. All in all, it appears that there is still some space for domestic producers to expand.